Beginning Next Week: InsideCounsel will become part of Corporate Counsel. Bringing these two industry-leading websites together will now give you comprehensive coverage of the full spectrum of issues affecting today's General Counsel at companies of all sizes. You will continue to receive expert analysis on key issues including corporate litigation, labor developments, tech initiatives and intellectual property, as well as Women, Influence & Power in Law (WIPL) professional development content. Plus we'll be serving all ALM legal publications from one interconnected platform, powered by Law.com, giving you easy access to additional relevant content from other InsideCounsel sister publications.

To prevent a disruption in service, you will be automatically redirected to the new site next week. Thank you for being a valued InsideCounsel reader!

European Commission introduces a major reinvention of agri-food safety standards

In May, the European Commission (EC) adopted a legislative package aimed at strengthening and streamlining health and safety standards in the European agri-food chain, a €750 billion industry that is the second-largest economic sector in the EU. As the EC has put it, the measures introduce smarter rules for safer food, from farm to fork.

Lawmakers were already discussing plans to revamp the laws governing the agri-food chain when the horse meat scandal hit Europe earlier this year. It was in January that Irish food inspectors first revealed they had found the presence of horse DNA in frozen beef hamburger patties being sold in Ireland and Britain. Further investigations found that horse meat had made its way across Europe; one French supplier was alleged to have sold horse meat labeled as beef to 28 companies in 13 countries. The findings led to widespread meat testing by EU countries, which ultimately found the presence of horse DNA in 4.66 percent of the samples. In a few cases, what was almost 100 percent horse meat was being passed off as other more expensive proteins.

The scandal led to a crisis of consumer confidence in the food industry and highlighted weaknesses in oversight of the EU food chain. The EC conceded that the incident had demonstrated the importance of proper controls and dissuasive sanctions and had eroded public trust in the government.

While the horse meat episode chiefly introduced concerns over fraudulent labeling, not food safety, it made the EC’s May proposal particularly relevant.

“Europe has the highest food safety standards in the world. However, the recent horse meat scandal has shown that there is room for improvement, even if no health risk emerged,” Health and Consumer Commissioner Tonio Borg said in a statement announcing the new legislative proposal. “Today’s package of reforms comes at an opportune moment as it shows that the system can respond to challenges; it also takes on board some of the lessons learned.”

Major Reorganization

Comprising hundreds of pages of proposed measures, the package is a major reinvention of agri-food safety governance in the EU. It streamlines nearly 70 pieces of legislation into five. All five are regulations, which means their provisions will be enforceable across the EU. They replace numerous directives, which require member states to adapt their own laws to achieve the EU’s stated goals.

The main criticism of the current system is that it incorporates different approaches toward the controls of food, feed animals and plants. For companies in the agri-food sector, implementing the rules was complex, says Raymond O’Rourke, a food regulatory expert in Dublin and a member of the European Food Safety Authority’s management board.

“The General Food Law [in 2002] and the Official Food and Feed Controls Regulation [in 2005] have brought about some overall coherence; this has, however, only been achieved by adding an additional layer of legislation,” O’Rourke says. “So this package aims to streamline things.”

Huge and Small

The new regulations have been significantly simplified and will now be constant across the EU, which the Commission says will reduce administrative burden, protect consumers and benefit businesses.

Three of the regulations apply to specific sectors along the food chain. They introduce enhanced risk-based standards and more efficiency and flexibility in the areas of animal health, plant health and plant reproductive material, including seeds. The other two address official controls and funding priorities in enforcing the new legislation

It is a thorough reorganization, but Brussels-based lawyer Jean Savigny says that the changes are simultaneously huge and small.

“They’re trying to streamline in these five areas, but there is not much change in the substance of the food laws except probably in the area of official controls,” says Savigny, a partner at Keller and Heckman.

Controversial Controls

The official controls regulation would introduce stronger and more transparent enforcement measures such as unannounced inspections and testing directed at combating food fraud. It also allows for the results of such inspections to be made public, strengthens cooperation between member states and creates a common framework for border import controls—measures clearly relevant to the horse meat scandal. The regulation would impose “sufficiently dissuasive” financial penalties and the application of criminal and/or administrative penalties on operators that fail to comply.

Most controversially, it requires operators to pay mandatory fees to fund enforcement measures.

What’s more, the mandatory fee provision comes in the form of a “delegated act,” a new form of law created under the Lisbon Treaty, which took effect in late 2009. Delegated acts allow the European Council and European Parliament to delegate authority to the Commission over the details of the legislation.

“What has to be decided through the delegated act is precisely how all of this would work. … And we don’t yet have the experience [with delegated acts] to know how this will work in practice, which adds to the concerns,” Savigny says.

There are dozens more such delegated acts in the official controls portion of the legislation.

Stakeholder Input

Since introducing the agri-food package, the EC has been taking comments on it, and many stakeholders—at this point, mostly trade and consumer groups—have raised concerns about uncertainty and the potential lack of transparency as the Commission drafts and implements the delegated acts.

Critics have asked for more clarity and new definitions so they can understand how the legislation will work in practice. Others have requested stronger controls over imported products, another area that lawmakers will surely debate going forward.

The legislation is still in the early stages, notes Izabela Blaszkiewicz, an associate at Hogan Lovells in Brussels. Blaszkiewicz has been tracking the process. “For now, the whole industry is generally monitoring the situation,” she says, because amendments to the proposal are inevitable.